iPhone Will Not Allow User Installable Applications

"The impression I got from the information coming out of the keynote was that the device would feature a full install of Mac OS X, and would run any and all desktop-based applications, as indicated by Apple asserting that the device "Runs OS X." You can imagine my surprise when while talking to the booth attendant I was informed that users will not actually be able to install any applications. This is a point of utter confusion with me. Why would Apple refer to the software running on the device as "OS X," when in reality, it will be running the long rumored stripped-down version of the operating system."